Which of the following formulae is INCORRECT?
Average collection period = 365/Creditors turnover ratio
The correct answer is Operating expenses = Cost of goods sold + selling expenses + Administrative expenses. This formula is incorrect as operating expenses do not simply add up cost of goods sold and selling expenses; they involve other items as well.
Important Questions from Ratio analysis
Which ratios are calculated for measuring the efficiency of operation of business based on effective utilisation of resources?
Which of the following ratio is also termed as leverage ratio?
Interest Coverage Ratio and proprietary ratio comes under:
Consider the below mentioned statements and state the correct code of the statements being true or false.
Statement (I): A debt-equity ratio of 2 : 1 indicates that for every 1 unit of equity, the company has raised 2 units of debt.
Statement (II): The cost of floating an equity issue is lesser than the cost of floating a debt
Code:
Debt Service Coverage Ratio indicates which one of the following?
